We are hearing more about the Trump/Ryan plan to phase out Medicare and replace it with private insurance and vouchers. But we’re still hearing much, much less than about Obamacare or a lot of other issues. Obamacare is super important. Don’t get me wrong. But Medicare is a much, much bigger deal. Most DC journalists don’t actually understand what’s being proposed. You think it’s hard getting good insurance when you’re 30 or 50? Try getting good private insurance when you’re 70 or 80.
Providing health insurance coverage to seniors will unquestionably cost more if run through private insurance. No one who has looked at the comparative data on the cost efficiency of Medicare and private carriers can question this. There’s no money savings. Quite the opposite. The only difference is that seniors will pay vastly more out of pocket because the vouchers won’t come close to the costs of a policy. The upshot of the Ryan plan is significantly increasing the cost of what society pays for the medical care of seniors and then making seniors pay dramatically more out of pocket. All with none of the bedrock gaurantees Medicare provides.
That’s what phasing out Medicare means. Ironically, what Trump and Ryan are proposing is something like Obamacare: you buy your insurance on an exchange and you get some premium support from the government. Obviously, not everyone loves Obamacare. But building an exchange and subsidy adjunct for non-seniors onto an existing and fairly robust private health insurance system is one thing. Creating one from scratch for people who are all pretty much by definition bad risks is close to laughable. Laughable if you’re not bankrupted or dying because you couldn’t get care.
Remember the other things Medicare significantly guard against. If parents have insupportable medical bills or have no way to pay for care, they go to children. In the absence of any other options, that’s how it should be. But that money comes out of other things: buying homes, putting kids through college. The social insurance model of Medicare has positive effects well beyond direct beneficiaries.
Ryan and Trump want to pass a bill to phase out Medicare in just six months.